# Broadband Grant Tax Treatment Act

This bill addresses how the federal government taxes money that internet companies receive when they get government grants to expand broadband service to underserved areas. Right now, there's confusion about whether these grants count as taxable income for the companies receiving them. The bill clarifies that when a company gets a federal grant specifically to build or improve broadband infrastructure, that grant money should not be treated as taxable income. In other words, internet service providers won't have to pay federal income taxes on the grants they receive for expanding broadband access.

The practical effect is that more of the grant money can go directly toward actually building broadband networks rather than being eaten up by tax bills. This makes federal broadband expansion programs more efficient and cost-effective. Without this clarification, companies might have faced large tax bills on grant money they received, which could have discouraged them from participating in government broadband programs or forced them to spend grant funds on taxes instead of infrastructure. By making it clear that these grants aren't taxable, the bill removes a financial barrier that could have slowed down efforts to bring internet service to rural and other underserved communities across the country.

Broadband Grant Tax Treatment Act

Moran, Jerry

Broadband Grant Tax Treatment ActThis bill excludes from gross income (for federal tax purposes) certain grants received for broadband deployment.As background, contributions of capital to a corporation generally are not taxable income. However, under an exception enacted in 2017 by the Tax Cuts and Jobs Act, grants from a government or civic organization are not contributions to capital and, thus, treated as taxable income. Prior to the Tax Cuts and Jobs Act, the&nbsp;Internal Revenue Service (IRS) considered certain grants from a government or civic organization&nbsp;contributions of capital and, thus, not taxable income.The bill specifically excludes from gross income grants received for broadband deployment from the<ul><li>National Telecommunications and Information Administration (NTIA) Broadband Equity, Access, and Deployment Program;</li><li>NTIA State Digital Equity Capacity Grant Program;</li><li>NTIA Digital Equity Competitive Grant Program;</li><li>NTIA Enabling Middle Mile Broadband Infrastructure Program;</li><li>Department of Agriculture ReConnect Program;</li><li>Coronavirus State and Local&nbsp;Fiscal Recovery Funds&nbsp;and the Coronavirus Capital Projects Fund; and</li><li>NTIA Tribal Broadband Connectivity Program and the Broadband Infrastructure Program.</li></ul>The bill also requires the IRS to issue guidance on the exclusion from gross income of such grants.The bill applies to funds received in tax years ending after March 11, 2021.